This will have one more bed and bath which will bring a higher nightly rate but I'd be happy if it performed as well as our current STR.

But I'm wondering whether it is wise to put more money down for lower interest rates or take a hit on interest rates and keep money in pocket?

There is no interest rate, its a flat fee based on the amount borrowed.

In most of these cases, you will be drawn in by 100% financing and be limited to an LTV ratio anyway; you're just stuck with a higher interest rate.

Less upfront costs and easier to manage.Most people see the nightly rates of STR and assume the net is higher, but that's not always the case.

I locked in a great rate at 2.25% in 2021. 

This is more difficult to secure in this high rate environment but so is a cash out refinance.  

Had the tenant let you know after they got the January bill and the water company didn't work out a deal with them, I might pay 50%....but the tenant dropped the ball big time and I wouldn't reward that behaviour. 

I then proceed to show them comparable sales in the area and a report we pay for that shows projected appreciation rates based on a variety of data. 2.

Rates will be in the low 7s.